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Capital diversion in Vietnamese state-owned enterprises

Author

Listed:
  • Cuong Le Van
  • Ngoc Minh Nguyen
  • Ngoc Anh Nguyen
  • Phu Nguyen-Van

    (EconomiX - EconomiX - UPN - Université Paris Nanterre - CNRS - Centre National de la Recherche Scientifique)

Abstract

We consider the capital productivity of a panel data set of 10,200 Vietnam state-owned enterprises over the period 2010-2018, using a stochastic frontier production modelling. We discover there exists an overutilization of the physical capital and more importantly, diversion of the capital stock. This diversion may be due to a waste of capital stocks or to a special form of bribery we call "hidden overhead". The very high diversion rate, 69% on average, calls for a profound reform of the sector.

Suggested Citation

  • Cuong Le Van & Ngoc Minh Nguyen & Ngoc Anh Nguyen & Phu Nguyen-Van, 2023. "Capital diversion in Vietnamese state-owned enterprises," Working Papers hal-04228589, HAL.
    • Handle: RePEc:hal:wpaper:hal-04228589
    Note: View the original document on HAL open archive server: https://hal.science/hal-04228589
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    References listed on IDEAS

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    1. Jondrow, James & Knox Lovell, C. A. & Materov, Ivan S. & Schmidt, Peter, 1982. "On the estimation of technical inefficiency in the stochastic frontier production function model," Journal of Econometrics, Elsevier, vol. 19(2-3), pages 233-238, August.
    2. Thang Ngoc Bach, 2019. "State owned enterprises and capital misallocation in Vietnam," Journal of the Asia Pacific Economy, Taylor & Francis Journals, vol. 24(3), pages 430-451, July.
    3. Paolo Mauro, 1995. "Corruption and Growth," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 110(3), pages 681-712.
    4. Battese, G E & Coelli, T J, 1995. "A Model for Technical Inefficiency Effects in a Stochastic Frontier Production Function for Panel Data," Empirical Economics, Springer, vol. 20(2), pages 325-332.
    5. Kumbhakar,Subal C. & Lovell,C. A. Knox, 2003. "Stochastic Frontier Analysis," Cambridge Books, Cambridge University Press, number 9780521666633, November.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Productivity; stochastic production frontier; hidden overhead;
    All these keywords.

    JEL classification:

    • E20 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - General (includes Measurement and Data)
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East
    • P20 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - General

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